Latin American leaders said today they will take their case for increased Western assistance directly to industrial nations at International Monetary Fund meetings in April and again at the industrial nations' economic summit in May.
Mexican Finance Minister Jesus Silva Herzog said the region continues to be strangled by its $360 billion foreign debt, although some progress has been made in easing the crisis in recent months. But Silva Herzog said that the nations will not be able to survive if they do not receive some assistance.
In a formal communique' issued last night, the foreign ministers and finance ministers reiterated calls they have made before for lower interest rates. They said that although rates have declined, they still are far too high and make it difficult for them to repay their debts. They also asked that the more generous repayment terms that debtor countries such as Mexico have negotiated with their bank lenders be extended to smaller countries as well.
The ministers also noted that because of the high debt burden and the high interest rates, the region is sending abroad far more dollars to foreigners than it is receiving each year, hindering its ability to develop.
Silva Herzog said the 11 debtor nations meeting here do not have specific proposals but are prepared to document to the United States and other industrial nations that the debt crisis is far from over and "needs a different approach than the business-as-usual" one adopted so far.
Foreign ministers and finance ministers at the Latin American economic summit went out of their way to avoid appearing confrontational, even though previous calls for joint meetings with industrial countries to address the debt question have been rejected by the United States.
The group, calling itself the Cartagena Consensus -- for the Colombian resort where the countries first met in June -- rejected a proposal to schedule a debt meeting unilaterally and invite the industrial nations to attend.
One finance minister said such a move might invite a snub from the United States. That would leave the Latin nations little choice other than escalating a confrontation with the West -- the biggest market for their goods -- or backing down, which might cause internal domestic problems in Latin America, where the debt has taken on a highly charged political character.
Argentine Foreign Minister Dante Caputo said the whole tone of the Cartagena group is "prudence." But Caputo said the debt discussion scheduled for the interim IMF meeting in April is "inadequate." The debt will be but one of a number of issues on the agenda.
However, Caputo said, the IMF meeting is a "practical and necessary" first step toward getting industrial governments to recognize that the debt burden eventually will cause widespread economic and social unrest in Latin America unless the debtor nations receive some help from richer countries.
Silva Herzog noted that last year Latin American debtors failed in an attempt to get a specific discussion of the debt problem on the agenda of either the IMF or the World Bank Development Committee, which meet at the same time in April. The Mexican minister called this year's meeting an "advance" for the debtors.
Ministers say publicly that they believe they can now produce a compelling enough case to persuade the United States that debt problems cannot be solved when only the bank lenders and the borrower countries are involved; in private, many say they are skeptical. One foreign minister said a dramatic development -- such as the collapse of a Peru or a Chile -- would be required to jar the United States into agreeing to join government actions to help debtor nations.
So far the United States has been willing to help in negotiations between a debtor country and its bank lenders as well as provide temporary assistance to a country once it reaches a loan agreement with the IMF. But the U.S. Treasury has ruled out any increased assistance to the debtors.
Officials at the conference said they have produced a joint document that will show specifically how the region has been decimated economically, how much economic policies that lead to higher interest rates and recession in Western countries have contributed to the Latin American plight, and what the region's development needs are.
With new bank lending all but dried up and debtor nations forced to husband a large portion of their export earnings to pay interest on existing debts, the region's greatest need is development capital.
Aside from inadequate internal savings, the only likely source of the funds in the future would be from the industrial governments themselves and from multinational bodies such as the World Bank, delegates to the summit said. They said the debtor nations also would like to work out more generous lending practices with the IMF, which generally requires stiff austerity measures before making loans to debtor countries.